Davies advising OMERS in US$400 million deal
Ultragenyx Pharmaceutical Inc., a US-based biopharmaceutical company specializing in treatments for rare and ultra-rare genetic diseases, has sold an additional 25 percent of its royalty interest in future sales of Crysvita (burosumab) in the United States and Canada to OMERS, one of Canada’s largest defined benefit pension plans. The deal is valued at US$400 million.
Crysvita is the first and only FDA-approved treatment for X-linked hypophosphataemia (XLH), a hereditary disorder that causes low phosphate levels in the blood. Phosphate is essential for building and maintaining strong bones and teeth, and patients with XLH can develop rickets, bone deformities, and growth problems. Crysvita is approved for use in children and adolescents aged 1 to 17 with signs of bone disease, as well as in adults. The drug is also used to treat osteomalacia, a condition characterized by the softening and weakening of bones, caused by phosphaturic mesenchymal tumours, particularly when the tumour cannot be located or surgically removed. In these cases, Crysvita can be used in patients aged one year or older.
Under the new agreement, OMERS will receive an additional 25 percent royalty interest on the net sales of Crysvita, effective January 2028. OMERS will also continue to receive 30 percent of Crysvita's net sales in the US and Canada after the cap from a 2022 royalty purchase agreement, set at 1.45 times the purchase price, is reached. Total payments to OMERS under the new deal are capped at 1.55 times the purchase price.
“In North America, Crysvita has generated more than $1.3 billion net sales in the first four years on the market making it one of the most successful launches in the rare disease field,” Ultragenyx CFO Mardi Dier said in a press release. “This non-dilutive financing bolsters Ultragenyx’s balance sheet, funds the ongoing commercialization of multiple approved medicines and the advancement of our diverse clinical pipeline. We are pleased to partner with OMERS on this transaction who, like us, recognizes the ongoing and future value of Crysvita, the tremendous success of the launch and the significance for patients who will continue to benefit from this important medicine.”
OMERS Capital Markets managing director and head of life sciences, Rob Missere, said, “Ultragenyx has successfully launched Crysvita, meaningfully improving the lives of thousands of pediatric and adult patients with two rare diseases. We are proud to invest in a product that has made a difference for so many and that aligns with the investment strategy at OMERS.”
Davies Ward Phillips & Vineberg LLP, Latham & Watkins LLP, and Sidley Austin LLP acted as legal advisers to OMERS. Gibson, Dunn & Crutcher LLP were the legal advisor to Ultragenyx, with TD Cowen acting as the exclusive financial advisor.
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